A sawmill paid $70,000 for logs that produced 200,000 board feet of lumber in 3 different grades and amounts as follows: Compute the portion of the $70,000 joint cost to be allocated to No. 2 Common.
A) $0.
B) $17,500.
C) $23,333.
D) $35,000.
E) $70,000.

Question

Quizplus · Accepted Answer

The portion of the $70,000 joint cost to be allocated to No. 2 Common is not specified directly, but assuming the allocation is based on the volume (board feet) of lumber produced, and without specific details on the proportion of each grade, a common method is to allocate costs based on the proportion of total production. Without the specific breakdown, we cannot calculate the exact figure, but option B) $17,500 suggests a scenario where No. 2 Common might represent a quarter of the total production, assuming an equal distribution of cost across different grades or a specific allocation method that results in this figure. However, without the detailed breakdown of the grades, this answer is speculative and assumes an equal or specific cost allocation method that results in $17,500 being allocated to No. 2 Common.

A Sawmill Paid $70,000 for Logs That Produced 200,000 Board